Chapter
3
Integrative
Managerial
Issues
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Learning Objectives
• Explain globalisation and its impact on
organizations.
• Discuss how society’s expectations are
influencing managers and organisations.
• Discuss the factors that lead to ethical and
unethical behavior in organisations.
• Describe how the workforce is changing and
its impact on the way organisations are
managed.
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Globalization and Its Impact
Globalisation is the trend, which has increased
significantly over the last two decades, of
companies operating almost anywhere in the
world.
Managers need to adapt to be successful in this
global environment and continue to foster an
understanding of cultures, systems, and
techniques that are different from their own.
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What Does It Mean to Be “Global”?
Global organisations are those
that:
• Exchange goods and services
with consumers;
• Employ managerial and
technical employees; or
• Use financial sources and
resources from other countries.
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Types of Global Organisations
Global village – A world without boundaries where
goods and services are produced and marketed
worldwide.
Multinational corporation (MNC) business – Any type
of international company that maintains operations in
multiple countries. There are three types of global
organisations:
• Multidomestic corporation – An MNC that
decentralises management and other decisions to
the local country where it’s doing business. Local
employees manage the business and marketing
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Types of Global Organisations (cont.)
strategies, which are tailored to that country’s unique
characteristics, and adapt the corporation’s products to
meet the needs of local markets.
• Global corporation – An MNC that centralises
management and other decisions in the home country.
World market is treated as an integrated whole. It
focuses on control and global efficiency.
• Transnational (borderless) organisation – An MNC
where artificial geographical boundaries are eliminated.
Country of origin or where business is conducted
becomes irrelevant. It increases efficiency and
effectiveness in a competitive global marketplace.
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How Do Organisations Go Global?
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How Do Organisations Go Global?
(cont’)
• Global sourcing (also called global outsourcing)
means purchasing materials or labour from the
cheapest source in order to maintain a competitive
edge-entering a global market with minimal
investment.
• Exporting and importing entail less investment and
risk than other steps in globalisation.
–- Exporting involves making products
domestically and selling them abroad.
–- Importing involves acquiring products made
abroad and selling them domestically.
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How Do Organisations Go Global?
(cont’)
• Licensing or franchising that involve one organisation giving
another organisation the right to use its brand name,
technology, or product specifications in return for a lump sum
payment or a fee that is usually based on sales.
• Making a more direct investment through a global strategic
alliance. It is a partnership between an organisation and a
foreign company partner created to share resources and
knowledge in developing new products or building production
facilities.
– A joint venture is a type of strategic alliance in which the
partners form a separate, independent organisation for a
business purpose.
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Managing in a Global Organization
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Managing in a Global Organisation
(cont.)
Geert Hofstede’s framework is one of the most widely
used approaches for analysing cultural differences. It
included the following dimensions:
1.
2.
3.
4.
5.
Power distance
Individualism vs. collectivism
Quantity of life vs. quality of life
Uncertainty avoidance
Long-term vs. short-term orientation
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Managing in a Global Organization
(cont.)
The Global Leadership and Organisational Behaviour
Effectiveness research program (GLOBE) has identified nine
dimensions on which national cultures differ. They include:
1. Assertiveness-the extent to which a society encourages
people to be tough, confrontational, assertive, and
competitive versus modest and tender.
2. Future orientation-the extent to which a society
encourages and rewards future-oriented behaviour such
as planning, investing in the future, and delaying
gratification.
3. Gender differentiation-the extent to which a society
maximizes gender role differences.
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GLOBE’s 9 Dimensions of Cultural
Difference (cont.)
4. Uncertainty avoidance: a society’s reliance on social
norms and procedures to alleviate the unpredictability
of future events.
5. Power distance: the degree to which members of a
society expect power to be unequally distributed.
6. Individualism/collectivism: the degree to which
individuals are encouraged to integrate into groups
within organisations and society.
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GLOBE’s 9 Dimensions of Cultural
Difference (cont.)
7. In-group collectivism: the extent to which members
of a society take pride in their membership in small
groups such as their family and circle of close friends
and the organisations by which they are employed.
8. Performance orientation: the degree to which a
society encourages and rewards group members for
performance improvement and excellence.
9. Humane orientation: the degree to which a society
encourages and rewards individuals for being fair,
altruistic, generous, caring, and kind to others.
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Society’s Expectations
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Social Responsibility
Social responsibility refers to a company’s
intention, beyond its legal and economic
obligations, to do the right things and act
in ways that are good for society.
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Social Responsibility (cont)
Social responsibility can be understood by comparing
the following similar concepts:
• social obligations: activities in which a business
engages to meet certain economic and legal
responsibilities.
• social responsiveness: social actions in which a
business engages in response to a popular social
need.
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Should Organizations Be Socially
Involved?
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The Importance of Sustainability
Sustainability is a company’s ability to achieve
its business goals and increase long-term
shareholder value by integrating economic,
environmental, and social opportunities into its
business strategies.
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Ethical Behavior and the different
views of ethics
Ethics is a set of rules or principles that defines right and
wrong conduct.
Three views of ethics:
• The utilitarian view of ethics says that ethical
decisions are made solely on the basis of their
outcomes or consequences. The goal of utilitarianism
is to provide the greatest good for the greatest
number of people.
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Different Views of Ethics (cont’)
• The rights view of ethics deals with respecting and protecting
individual liberties and privileges such as the right of free
consent, the right to privacy, and the right of free speech.
The goal of decision makers is to avoid interfering with the
rights of others who might be affected by the decision.
• The theory of justice view of ethics emphasises that
an individual should be equitable, fair, and impartial
in making decisions.
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Factors Determining Ethical Behavior
Whether a manager or employee acts ethically
or unethically depends on several factors:
• Morality
• Values
• Personality
• Experience
• Organisation’s culture
• Issue being faced
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Encouraging Ethical Behaviour
Three ways in which managers can encourage ethical
behaviour and create a comprehensive ethics program
include:
• Establishing a code of ethics-formal document
outlining an organisation’s primary values and the
ethical rules it expects managers and employees to
follow.
• Providing ethical leadership-managers must be good
ethical role models, both in words and actions.
• Offering ethics training-conducting ethics training
programs to encourage ethical behaviour.
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Ethical Leadership
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Ethics Training
• Critics say that people establish individual
value systems when young and can’t learn
later in life.
• Proponents state that ethical problem solving
increases :
– Ethical behaviours
– Level of moral development
– Awareness of ethical issues
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The Changing Workforce
Diversity is visible in age,
gender, race, physical
attributes, styles of dress,
and personality type.
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Workplace Diversity
Workforce diversity is
defined as the ways in
which people in an
organisation are both
different from and similar
to one another.
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Types of Diversity
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Adapting to a Changing Workforce
Managers are adapting to changes taking place in the workforce
with diversity initiatives such as:
• Work-life balance programs-many organisations now offer
family-friendly benefits that provide flexible scheduling
options that allow employees more flexibility at work, on-site
child care, flextime, job sharing, telecommuting, part-time
employment, and more.
• Contingent workforce-part-time, temporary, and contract
workers who are hired on an as-needed basis. Managers
should motivate both full-time and contingent workers and
build their commitment to work.
• Generational differences-which can be accommodated by
flexibility in management styles.
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